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Peter Hambro Mining (POG)

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Monday 17 July, 2006

Peter Hambro Mining

Trading Statement

Peter Hambro Mining PLC
17 July 2006


17 July 2006

                                 Trading Update

Peter Hambro Mining Plc ("PHM" or the "Group") issues this trading statement as
an update and in advance of its results for the six months to 30 June 2006 ("the
Period"). A full results announcement will be issued on 21 September 2006.

Highlights for the Period include:

• Production:

o       PHM total attributable production of 108,363 oz is 6 % up on the same
        period for 2005 with Pokrovskiy Mine production of 93,600 oz of gold for 
        the period, 11% up on the same period 2005;

o       Omchak Joint Venture attributable production of c.11,500 oz of gold for
        the period. This is 32% lower than the same period for 2005 but in line 
        with the Group's forecast;

o       The Group is on track to meet its 250,000 oz per annum production target
        for 2006

• Unit costs at Pokrovskiy were in accordance with the Group's internal
  forecast for the first six months of the year;

• Average realised gold sales price was US$573/oz, which is 36% higher
  than the same period last year;

• Geological highlights

o       At Pioneer, geochemically predicted high grade ore columns have been
        confirmed by drilling; some with exceptional grades of more than 1,200 
        grams of gold per tonne;

o       At Malomir 67 intersections have been identified with 12 ore bodies with
        grades up to 20 g/t (averaging 1.2-3.0 g/t) over thicknesses of 3m to 93m;

• The Group announced in January 2006, its detailed plan, expected costs
  and evaluation regarding the 2009 "Million Ounce" production target. The related
  capital expenditure programme for this is on track;

• The International Finance Corporation exercised fully its right to
  invest a further US$17.4m and subscribed for further ordinary shares in PHM;

• Positive conclusions of an independent review by SRK of the potential
  of the licence areas in the Yamalanenetsky Autonomous Region.


Commenting on the announcement, Peter Hambro, Executive Chairman, said:

"It is again a pleasure to report more and solid progress by PHM during the
first half of the year. PHM has seen growth in attributable production, in spite
of a reduction in our Omchak joint-venture ownership. The success of the
expansion of the Pokrovskiy plant has helped to increase production there by
11%. The Pokrovskiy Mill now has 1.8 million tonnes per year capacity and the
modifications in the heap leach methods we are using show that the processing of
very low grade ore is now economically viable.

It is noteworthy that the production increase at Pokrovskiy comes while
intentionally processing lower grades at a time of high gold prices; thus
increasing the overall reserve and resource base at this deposit.

Overall we have marginally beaten our plans, achieved positive exploration
developments and continued our planned advance towards the "Million Ounce"
target that we have set ourselves.

The results of exploration work on the fanglomerates and flanks of Pokrovskiy,
at Pioneer and at Malomir continue to support our belief that the gold in the
ground is more than sufficient to achieve this. It is particularly reassuring
that the high grade ore columns that our geologists predicted would exist at
Pioneer have been confirmed by drilling and assaying. Bonanza grades of over
1,200 grams of gold per tonne of ore are a welcome bonus.

At the Yamal licence areas, our expectations have been confirmed and supported
by SRK's report of the existence of ore grade mineralisation potentially
containing in excess of 5m oz of gold in two licence areas. I believe this is
evidence of the long term benefits that come from a strong and sustained
commitment to exploration.

It is a testament to the focused efforts of our management and all employees
that, despite the pressures on our operating costs, Pokrovskiy continues to be
one of the lowest cost producers in Russia"


Operations Report

Pokrovskiy Mine

Pokrovskiy Rudnik is continuing the success achieved during 2005 producing
93,600 oz of gold compared to 84,600 oz in the same period of 2005.

Unit operating costs were generally contained in line with those of the previous
period, despite increases in raw material costs, rouble appreciation and the
mining of harder ore.

In addition to the equipment bought in 2004-2005, another five 45-tonne capacity
Belaz trucks were acquired and put into use. This allowed stable mining levels
in line with the schedule and contributed to mining cost optimisation. The old
30-tonne capacity Belaz trucks were repaired and sold as part of the programme
of cost savings introduced in 2005 and successfully implemented during the first
half of 2006.

Mining operations

Pokrovskiy Rudnik Mining Operations
                                                           6 months to June 30th
                                        Units        2006        2005      Var %
Mining
Total Material Moved                  m(3) '000     2,624       2,427       +8%
Ore mined                               t '000        889         616      +44%
Average grade                            g/t          3.2         3.7      -14%
Gold content                           oz '000       90.9        73.8      +23%
Of which high grade ore                 t '000        717         402      +78%
Average grade                            g/t          3.9         4.9      -20%
Gold content                           oz '000         90          64      +41%

Processing operations - Resin in Pulp plant

818,000 tonnes of ore were treated through the mill in the first half of the
year - 18% more than during the same period in 2005 - and the plant's capacity
reached an annual rate of 1.8 million tonnes of ore in June 2006. Works on the 
planned plant expansion and production streamlining will continue during the 
second half of the year.

Due to the high standard of works undertaken in 2004-2005 for the plant's
expansion, the resultant increased capacity of the mill allowed economic
processing of lower grade material and increased total gold produced. Previously
this material would have been treated using heap leach technologies which have
lower recovery rates than the plant.

An increase in the gold price enabled treatment of lower grade material not
previously included in the Group's reserves. This helped increase the total
reserves of Pokrovskiy Rudnik.

Some decrease in recovery rates compared to the same period last year (86.6% in
2006 vs. 92.2% in 2005) can be explained by an increased proportion of hard rock
being treated through the mill. Technological improvements were made to the
Resin in Pulp plant in order to increase recovery rates from the harder ores and
these new technologies are currently being implemented at the plant and are
expected to bring recovery rates up to 91% in the second half of 2006.

Heap Leach

Test work carried out during last year in order to improve heap leach technology
proved successful, allowing the application of new methods this year on a larger
scale. These involve ore being left on heap leach pads through the winter until
spring for further leaching and ore for the following year's treatment being
stacked on pads during autumn of the previous year. This method allowed the
start of the leaching one month earlier than in the previous year and produced
2,000 oz of additional gold from these test works; significantly improving
recovery rates at the pads under test from 30.7% in the first half of 2005 to
68.3% in the same period of 2006. This will give the Company an opportunity to
treat a larger amount of low grade ore through the heap leach process and also
to increase recovery rates using this process.

It should be noted, however, that the exceptionally cold recent winter in Russia
caused the stacking of new ore on the pads to be delayed by approximately one
month.

Pokrovskiy Rudnik Processing Operations
                                                           6 months to June 30th
                                      Units       2006        2005         Var %
Resin in Pulp Plant
Ore from pit                         t '000        717         402         +78%
Average grade                          g/t         3.9         4.9         -20%
Ore from stockpile                   t '000        102         281         -64%
Average grade                          g/t         3.0         2.4         +25%
Total milled                         t '000        818         691         +18%
Average grade                          g/t         3.8         3.9          -3%
Gold content                         oz '000      99.6        86.5         +15%
Recovery rate                           %         86.6%       92.2%         -6%
Gold recovered                       oz '000        86          80          +8%
Heap Leach
Ore stacked                          t '000        345         341          +1%
Average grade                          g/t         1.0         1.4         -29%
Gold content                         oz '000        11          16         -31%
Recovery rate                           %         68.3%       31.0%       +120%
Gold recovered                       oz '000         7           5         +40%
Total
Gold recovered                       oz '000      93.6        84.6         +11%


The measures introduced enabled increased production from lower grade material
which had not previously been accounted for in the mineable reserves of the
deposit. This resulted in an increase of reserves and mine life extension.

Table showing the breakdown of gold production at Pokrovskiy Rudnik by month for
the six months to June 30th 2006 vs. 2005 (ounces)

Month                                          2006                       2005
January                                       14.69                      13.70
February                                      12.25                      11.23
March                                         15.37                      12.81
April                                         16.77                      11.32
May                                           17.38                      16.66
June *                                        17.10                      18.86
Total                                         93.6                       84.6

* The somewhat lower production in June is a result of intentionally processing
lower grades which began in May, a time of high gold prices. Nevertheless the
production numbers are in line with the Group's internal monthly and annual
forecast.

Pioneer Mine

Mining operations at Pioneer during the first half of 2006 were aimed at
finalising geological exploration of the deposit and preparation for its full
scale exploitation. This involved in particular, the collection of bulk samples
for metallurgical tests from the Bakhmut and Promezhutochnaya ore zones.

                                                  -----------         ---------
Mining operations              Units                 2006 1H            2005 1H
---------------             ----------
                                                      Actual             Actual
                                                  -----------         ----------
---------------             
Pioneer Deposit
---------------             ----------            -----------         ----------
Total Material Moved          '000 m3                   392                328
---------------             ----------            -----------         ----------
incl. stripping               '000 m3                   385                308
---------------             ----------            -----------         ----------
ore                           '000 m3                     7                 19
---------------             ----------            -----------         ----------
Ore Mined                     '000 t                     13                 36
---------------             ----------            -----------         ----------
Grade                           g/t                     1.3                2.8
---------------             ----------            -----------         ----------
Gold                          '000 oz                   0.5                3.2
---------------             ----------            -----------         ----------

Omchak Joint Venture

Through its subsidiaries, the Omchak JV produced c. 23,000 of gold. As almost
80% of the gold produced by the Omchak JV is from alluvial deposits, the
majority of production occurs during the second half of the year and the
exceptionally cold weather in the area exacerbated the skew in production. PHM's
attributable share of production was 11,500 oz. This was a 32% decline compared
to the same period in the previous year due to PHM's previously announced
decreased share in the JV, down from 65% to 50%.

OOO Zeyazoloto and OOO Noviye Tekhnologii, which were acquired by the joint
venture in 2005, continued successfully, producing c. 1,447 oz. gold. Alongside
their successful production activities these companies were also involved in the
acquisition of local licences for the right to explore and produce alluvial gold
at local deposits. New licensed areas acquired in this process have confirmed
reserves that are expected to yield a planned annual production of alluvial gold
in the Amur region of c.10,000 oz gold per year starting in 2007 for upwards of
five years.

The Uduma deposit located in the Sakha Republic (Yakutia) was also acquired by
Omchak in 2005. Evaluation works were carried out at this deposit in order to
complete an audit of reserves and produce a detailed production plan for 2007
and 2008 by the end of this year.

At the assets in the Chita Region, development and confirmatory exploration
works have been carried out; including environmental studies, and topographical
works concerning the reclamation of land in accordance with the conditions set
out in the licence agreements.


Exploration and Development Report

Exploration activities during the period were concentrated primarily on assets
involved in the Group's "Million Ounces" production plan. Currently the Group is
at the stage of preparing all necessary works which need to be done within the
framework of feasibility studies for this plan. During the first half of the
year 260 drill holes were made with a total length of 41,578m, and 320,575m3 of
trenching was excavated.

Pokrovskiy Flanks

Metallurgical and geological studies were continued on the fanglomerates at
Pokrovka-II and the main results are expected in the second half of 2006.
Exploration also continued on other areas of the Pokrovskiy flanks, namely the
Verkhne-Sergeevsky, Dalniy and Kontaktoviy areas where new ore intersections
were crossed and exploration works need to be continued.

Pioneer Deposit

Exploration work at Pioneer was concentrated on the geological and metallurgical
elements necessary for the planned commencement of production in 2007. Bulk
sampling for metallurgical test work was also carried out to verify assays from
trench and shallow-hole sampling.

At the Promezhutochnaya and Yuzhnaya zones, infill drilling was undertaken in
the recently discovered ore columns, together with the construction of a 330m x
230m shallow open-pit to expose the ore zone and ore column so as to check the
continuity of mineralisation. Shallow confirmation drilling was performed
adjacent to the deposit to establish the absence of mineralisation in areas of
planned infrastructure. Shallow exploration drilling was also undertaken in the
Zvezdochka and Vostochnaya zones. As a result of all these studies two high
grade ore columns were confirmed at the Promezhutochnaya zone, with reported
gold grades in them up to 198 g/t. Three ore columns were established in the
Yuzhnaya zone with reported gold grades up to 20 g/t. At the Andreevskaya zone a
predicted ore column was duly confirmed. This was intersected by two drill holes
and showed gold grades up to 1,225 g/t. However exploration work had to be
suspended until the autumn because of boggy ground conditions.

Based on the new geological model of Pioneer, drilling (hole no.337) on the
intersection of a satellite lineament and fault at the Andreevskaya zone, in an
analogous position to the Bakhmut zone Apophysis 1, has resulted in the
discovery of a very high grade gold/silver intersection: two samples with grades
of 1,225 and 1,064 g/t Au, and an average grade of 222 g/t Au over an 8.5m
interval at a downhole depth of 70-78m from surface (true depth estimated at 60-70m).

Malomir

In the first half 2006, as a result of drilling and trenching  in black shales
on the left bank of the Malomir river, three shallow-dipping ore zones in quartz
/sulphide stockworks above the Diagonal thrust were outlined. This work allowed
identification of 67 intersections with 12 ore bodies. Gold grades were
established up to 20 g/t (averaging 1.2-3.0 g/t) over thicknesses of 3m to 93m.
 Reserves and resources on the evaluated part of the deposit are C1 1.3 m oz of
gold, and C2+P1 1.6m oz of gold. In addition, 6 metallurgical bulk samples
(140-2,000 kg) were sent for testing. Trenching exploration works have been
started on the Quartzite zone (beresitised granitoids) to the north of Malomir
river. The extension of the main Malomir ore zone to the north-east was further
explored; and positive indications which were previously only predicted were
confirmed by real exploration data.

Yamalzoloto and Yamal Mining Company

An independent review by SRK of the potential of the Toupugol-Khanmeishorsky
licence area and the status of the Novogodnee Monto project was completed. The
report stated that the licence area represents a high quality exploration asset
with significant potential and that the current work being carried out is
justified and that the project clearly has the potential to support an operating
mine. The report concluded that "the two licences combined represent a valuable
addition to the Peter Hambro Mining Plc portfolio and that it is reasonable to
expect that the Feasibility Study at Novogodnee Monto, combined with ongoing
exploration of the Toupugol-Khanmeishorsky will in due course confirm the
existence of ore grade mineralisation containing in excess of five million
ounces of gold."

It is also expected that magnetite zone reserves at Novogodnee Monto will be
confirmed in September 2006. Exploration was also continued at Petropavlovskoye
where a 2,500m length of continuous mineralised zone has been established.
Promising preliminary exploration results for gold and platinum group metals
were also received at some of the licence areas of Yamal Mining Company.
Detailed results will be announced when available.

Izvestkovaya Sopka

Three separate high grade ore intersections in pyroxene skarns have been
discovered in trenches with gold grades from 1.08g/t to 327 g/t, averaging 33.8
g/t over a thickness of 10 m. Exploration by drilling and trenching is
continuing.

The orebody has been followed down dip by drilling and trenching (gold grade
16.6 g/t over a 19.0m thickness) in the Maristy stream valley. An ore interval
of silver, 610.3 g/t over a 3.0m thickness, (maximum 1,169 g/t over 1.0m) in
skarns was also discovered. Gold has not been found in these samples.


Gold Price/Treasury

The Group's average realised gold price for the period was US$573/oz, up 36%
against US$422/oz during the first six months of 2005. The Russian rouble
strengthened against the US Dollar by 6% during the Period and was RuR27.0789/
US$ at 30 June 2006 (RuR28.04/US$ - 30/6/05, RuR28.78/US$ - 31/12/05).  The
Group has a policy of no long term gold forward sales or hedging.


July Site Visit

From 11th to 14th July 2006 a number of institutional analysts made a site visit 
to the Pokrovskiy operations and attended a geological workshop.

During the course of the workshop the visitors asked about preliminary exploration 
results. Amongst this was information concerning preliminary assay results from 
deposits in the Yamal Region in relation to Platinum, Palladium, Gold and Copper 
grades.  Due to the nature of its early-stage exploration these assay results 
are not yet sufficient to make investment decisions or predict the economics of 
recovering what metal they might contain.



Conference Call

A conference call to discuss today's trading update will be hosted by Peter
Hambro, Executive Chairman of Peter Hambro Mining Plc at 14:00 pm UK time.

Details to access the conference call are as follows:

The Dial-in number in the UK will be: 0845 245 3471 and internationally it will
be +44 (0) 1452 542 300 with the access code in both cases 2813327.

Replay will be available after the call has finished for seven days on 0845 245
5205 in the

UK and on +44 (0) 1452 55 0000 internationally with the access code in both
cases 2813327#


Enquiries:
Alya Samokhvalova / Marianna Adams                      +44 (0) 20 7201 8900
Peter Hambro Mining Plc

David Simonson / Tom Randell / Maria Suleymanova        +44 (0) 20 7653 6620
Merlin







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